Yeah, a link could've sufficed. I read it on NYT.com yesterday when it originally was posted. Decent read.

But that is not the short version at all. The short version is "Apple won't build the iPhone in the United States because it would eat into profit margins. As an excuse, Apple states there's not enough skilled labor in the U.S., but in reality they mean there isn't enough skilled labor they can wake up in the middle of the night and force to work a 12-hour shift because Steve Jobs demanded a glass screen last minute" - or something close to that.

Corning was founded in America 161 years ago and its headquarters are still in upstate New York. Theoretically, the company could manufacture all its glass domestically. But it would require a total overhaul in how the industry is structured, Mr. Flaws said.

Therein lies the solution. Require that for any product shipped in from a foreign country. Must be produced at factories that follow the same environmental regulations and OSHA regulations that a factory on US soil would have to provide. Also require those workers to be paid the same as would be expected of a US worker along with pensions, benefits &c. If the product type is dominated by unions then exorbitant union wages and benefits must be met. This would encourage companies to return to producing within the US again.

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Therein lies the solution. Require that for any product shipped in from a foreign country. Must be produced at factories that follow the same environmental regulations and OSHA regulations that a factory on US soil would have to provide. Also require those workers to be paid the same as would be expected of a US worker along with pensions, benefits &c. If the product type is dominated by unions then exorbitant union wages and benefits must be met. This would encourage companies to return to producing within the US again.

Actually that really isn't the point of the article at all. The short version is more like, "The US can't provide resources with the same speed and low labor cost as China." The estimated price increase from a US-made iPhone (+$65) is mentioned once in the entire 7-page article.

Actually that really isn't the point of the article at all. The short version is more like, "The US can't provide resources with the same speed and low labor cost as China." The estimated price increase from a US-made iPhone (+$65) is mentioned once in the entire 7-page article.

Apple contributes quite a bit to the US economy. First of all, Apple's products are designed by engineers in Cupertino. Also, if you look at the BOM for iOS devices, a lot of them are designed by American companies. For example, Qualcomm supplies the CDMA chip for the iPhone and iPad. Qualcomm is an American company. Qualcomm is putting money in the pockets of Qualcomm and its employees in the process. Also, Apple operates tons of stores in the US. That provides jobs. Apple and other players in the smartphone space, e.g. Google, have ushered in a new era in mobile applications. We have barely scratched the surface of what mobile apps can do. From 2008 to 2010, Apple paid out over $1 billion to iOS developers. The App Store has helped the mobile applications industry grow by leaps and bounds, creating thousands of jobs in the process.

So manufacturing jobs aren't the only way of contributing to the US economy. And it's funny how whenever there's an article about Foxconn, there is practically no mention of any other customers of Foxconn besides Apple.

Did you know that the best Android phones on the market are designed entirely by foreign corporations. At least Apple provides some jobs to Americans such as engineering jobs, retail jobs, software jobs, etc. but the best Android phones provide even less than that.

It's not sustainable to run a business at a razor thin margin. Maybe in the beginning, Apple could take a hit to their margins. But over the long term, Apple is at a disadvantage. Competitors can undercut Apple on price. Apple would have to charge higher and higher prices just to break even.

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Actually that really isn't the point of the article at all. The short version is more like, "The US can't provide resources with the same speed and low labor cost as China." The estimated price increase from a US-made iPhone (+$65) is mentioned once in the entire 7-page article.

It's not sustainable to run a business at a razor thin margin. Maybe in the beginning, Apple could take a hit to their margins. But over the long term, Apple is at a disadvantage. Competitors can undercut Apple on price. Apple would have to charge higher and higher prices just to break even.

Um, the iPhone 4S costs $188-245 to make depending on the model for versions that costs $649-849 unlocked or $199-399 and your carrier subsidizes a considerable amount. If they added say $30-65 per phone, they didn't have to raise prices. It would just cut into their not-even-close industry leading profit margins per phone.

The article quoted sources estimating $65 in additional wages. That sounds a little high, but reasonable. Each iPhone currently costs about $3 in Foxconn labor, or 1/100 of a worker's monthly $300 salary. A US factory worker making $3000 a month would raise the cost by ten times = $30, but then you have to add in Social Security, pension, health care training, etc, which would likely double that.

Ignoring other factors, let's say it did cost $65 more to build an iPhone in the USA:

Currently Apple has the largest profit margin in the smartphone business, estimated as high as 55%. Thus an iPhone that sells for $650 makes $355 for Apple. If a USA version "only" made $355-65= $290, then that would be 290/650 = 44% profit margin, which is still at the high end of smartphone profits.

Yes, and carriers have paid out $3 billion to BREW developers for dumbphones. Mobile is good all over.

Did you know that the best Android phones on the market are designed entirely by foreign corporations. At least Apple provides some jobs to Americans such as engineering jobs, retail jobs, software jobs, etc. but the best Android phones provide even less than that.

Quite the contrary, companies like Samsung and HTC have a large US mobile industry presence, with R&D labs and support personnel all across the country.

(Apple has about 12,000 corporate employees in CA, IIRC. Samsung alone employs over 10,000 within its US corporate and R&D staff in states like TX and NJ. I don't know how many HTC has, but their mobile software design strategy is done in their labs near their Seattle HQ, and they have other wireless labs in NC and GA.)

Samsung's new $9 billion CPU chip factory in Texas was that state's largest foreign investment. Much of its output is destined for Apple, which simply proves that US factories are not impossible.

As for retail jobs, Samsung sells more phones than Apple in the USA, with higher sales royalties.

Companies like Samsung also bend over backwards to be good philanthropic community citizens, something Apple is not noted for (although hopefully Cook is going to change that).

It's not sustainable to run a business at a razor thin margin. Maybe in the beginning, Apple could take a hit to their margins. But over the long term, Apple is at a disadvantage. Competitors can undercut Apple on price. Apple would have to charge higher and higher prices just to break even.

Currently Apple has the largest profit margin in the smartphone business, estimated as high as 55%. Thus an iPhone that sells for $650 makes $355 for Apple. If a USA version "only" made $355-65= $290, then that would be 290/650 = 44% profit margin, which is still at the high end of smartphone profits.

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The point of the article is that the infrastructure does not exist here in the US and it would be literally impossible to do what the Chinese do and how quickly they do it. For those that read the article, a few key examples were given. Foxconn hired over 8000 production engineers. In 15 days. Try that anywhere else in the world. The Foxconn complex is a city of over 230,000 employees. Many components are manufactured right there. Utterly amazing.

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Makes you wonder what would happen if Apple and similar companies built large manufacturing complexes in the US, and even hired some of those Foxconn workers to move over as well, just to keep the ball rolling. They could make the entire complex from scratch with ultra efficiency. Glass, chips, plastic, screws and everything else could all funnel directly to the assembly line, which ends at a trucking / train depot for shipment. As the productions grow, Americans would be filling more and more jobs.

Apple seems to have enough money to make the change, but it's all about being willing to have the balls to do it in the face of maximizing short-term profits. If China were to somehow become an enemy, it would force that change, anyway. Let's hope that doesn't happen, but it's an example of how fast Apple could go from billions to bankrupt in a flash.

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